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The Enterprise Market in 2025 - Digital Futures 2025

• How will the future nature, shape and size of the enterprise buyer of 2025 differ from today? • Which ‘taken for granted’ services will disappear? • What factors will enable SPs to succeed, or cause them to fail? Evan Kirchheimer, Practice Leader, Ovum

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The Enterprise Market in 2025 - Digital Futures 2025

  1. 1. The Enterprise Market in 2025 Evan Kirchheimer Practice Leader Enterprise Services Ovum
  2. 2. 1. At stake: a huge amount of wallet share Comms/ network Applications IT Mgt Infrastructure Source: Ovum ICT Enterprise Insights, Global– External ICT spend, 2015. Numbers may not add up to 100% due to rounding. Implication: Almost 80% of enterprise ICT spend is not on communications or networks. But does more network-based ICT offer an opportunity? 22% 24% 25% 28% IT Budget Allocation:2015 to 2016 Digital Futures: The World in 2025 © Ovum 2015, Informa Telecoms & Media Ltd
  3. 3. 2. Cloud and mobility will continue to impact all enterprise services ICT services Fixed voice PSTN Mobile voice and data Public cellular network Managed network services Access, leased line, VPN Compute Hosting, data center, compute, storage Unified communications Managed telephony, IM, conferencing, video, collaboration and contact centers Applications App development, managed OS, desktop, productivity and business apps Managed security Network, perimeter, device, application, threat detection, DDoS prevention Cloud • IaaS • PaaS • SaaS Managed Mobility & Workspace • Contract • Devices • Campus wireless • Apps • Desktop Professional services Digital Futures: The World in 2025 © Ovum 2015, Informa Telecoms & Media Ltd
  4. 4. 3. Picking battles in ICT will be essential BusinessProcessImplications Threat from non-telco IT providers Fixed voice/data Mobile voice and data Applications Managednetwork services UC Managed mobility/ workspace Compute Managed security Telco legacy- commoditized Telco advantage - commoditizing IT advantage - increasingnetwork dependence Digital Futures: The World in 2025 © Ovum 2015, Informa Telecoms & Media Ltd
  5. 5. Strategic  Mgd Network, compute, mgd mobility/ workspace, UC, apps, security Legacy  Fixed voice  Mobile voice/data 4a. Have hope! Telcos are succeeding at substituting legacy services • Telco strategic managed services will overtake legacy enterprise services revenues (including fixed voice and mobile voice & data) by 2019 $m - 50,000 100,000 150,000 200,000 250,000 300,000 350,000 2013 2014 2015 2016 2017 2018 2019 2020 Legacy services Strategic services Implication: An opportunity for telcos to differentiate across a new range of applications services. Telcos need to manage the increasing complexity of their services portfolios Source: Ovum, Telco-managed ICT services forecast 2014-20 Digital Futures: The World in 2025 © Ovum 2015, Informa Telecoms & Media Ltd
  6. 6. 4b. Telcos are also taking a greater share of global ICT Services revenues • Telco revenues in like-for-like enterprise managed services are less than 13.7% of the global IT services market • But by 2020 telco strategic services will account for nearly 18% of global IT services • Dependencies: – Cloud/IaaS/SaaS – Professional services expertise – Sales force transformation Digital Futures: The World in 2025 © Ovum 2015, Informa Telecoms & Media Ltd
  7. 7. 4c: Apps, mobile, cloud: you’ve been warned 6% 6% 6% 7% 5% 7% 7% 10% 16% 17% 17% 18% 22% 21% 24% 23% 23% 23% 24% 27% 26% 27% 27% 25% Fixed voice services UC, collaborationtools and call centers Traditional hosting and data centre services Mobile voiceservices Fixed data services Business applications Mobile dataservices Cloud computing services European enterprises: 2015 budget growth areas Increase over 10% Increase 5-10% Increase 0-5% Implication: Six out of 10 European enterprises will increase compute spend, and a third will grow their budget by 10% or more – but this growth will be concentrated in some domains Digital Futures: The World in 2025 © Ovum 2015, Informa Telecoms & Media Ltd
  8. 8. 5. Regional growth continues to point to AP, ME and Africa 8.9% 12.2% 11.7% 9.4% 11.3%11.2% 9.6% CAGR 2013 – 2020: Telco-Managed Global Strategic ICT Services Digital Futures: The World in 2025 © Ovum 2015, Informa Telecoms & Media Ltd
  9. 9. 6. Telco deals: more complex, more expensive • Telcos are making their money in the $20m-$500m range • >50% of that opportunity is below $100m • Enterprises are becoming more comfortable with a supplier mix, especially regionally • Emerging MNCs from new regions fuelling this shift Implication: Regional expertise, service specialisation and partnering become more and more critical Top 1,000 deals(2010/2014) Numberofdeals 0 200 400 600 800 1000 2010 2014 500 + 20 - 499 1 to 19 TCV/deal ($m) $5.9b $7.4b $10.8b $23.1b $2.5b $3.2b Digital Futures: The World in 2025 © Ovum 2015, Informa Telecoms & Media Ltd
  10. 10. 7. Telcos will continue to struggle with the ICT business model • Telcos have nearly DOUBLED their global contracts pipelines in the space of 5 years • However, growing profitability has been a lot harder for many Implication: Commercial and financial innovation, for example in licensing and finance, are as important as technology solutions Digital Futures: The World in 2025 © Ovum 2015, Informa Telecoms & Media Ltd
  11. 11. 8. Finance departments make the deal Who influences your choice of strategic telecoms andtechnology suppliers andhow is it changing? “Increasing influence” Implication: The customer has changed. There are more ICT decision influencers and they are more conservative in their views about telco capabilities. Telcos must continue to invest in sales team transformation with cross-business knowledge Source: Ovum Enterprise Insights Digital Futures: The World in 2025 © Ovum 2015, Informa Telecoms & Media Ltd
  12. 12. 9a. It’s well past the time to focus just on the high- end Digital Futures: The World in 2025 © Ovum 2015, Informa Telecoms & Media Ltd
  13. 13. 8.1% 8.1% 11.9% 38.5% 33.3% 9b: Telco leadership agrees on the SME opportunity SoHo / SME / SMB Enterprise Government WholesaleConsumer Telcos: Which customer segment offers the best growth potential? N=135 operators Source: Ovum 2014 Telecoms Cloud Global Insights Survey Implication: The question is how to tap it. Cloud services and virtualization technologies are enabling outreach to a wider set of enterprises across verticals and size groups Only 0.45% of UK businesses have more than 250 employees c.53% of employees work for firms with <250 employees Digital Futures: The World in 2025 © Ovum 2015, Informa Telecoms & Media Ltd
  14. 14. 9c. The challenge: how to address this diversity SMEs employ all kinds of people – including a significant number of semi-skilled workers. What’s needed are value propositions that are relevant to a major percentage of the total SME (and SoHo) universe on a national basis. Professional, scientific and technical services Wholesale & retail* Food and accommodation Construction Manufacturing *inc. motorcyclerepair Digital Futures: The World in 2025 © Ovum 2015, Informa Telecoms & Media Ltd
  15. 15. 10a. Telcos must foster and not just support heterogeneous device landscapes Source: Ovum Employee Mobility Survey 2015 38.6% of employees who use their own smartphone for work (and also have a corporate-providedphone) do it because they prefer it to the one provided by their employer 43.4% of those who use their own tablet for work do so because of a range of applicationsthat let them do their jobs better 43% of those who use their own laptopfor work do so because it can be more convenientin certain situations,such as when travellingor at home 50% of those who use their own wearable for work do so because it lets them keep up to date with work issues all day long Digital Futures: The World in 2025 © Ovum 2015, Informa Telecoms & Media Ltd
  16. 16. 10b. Not just the device - employment will also be ‘fragmented’ “23.9% of Australianworkers are casual employees” - Australian Bureau of Statistics (ABS) The emergence of new digitalplatforms will add 2.5 per cent to Europeanemployment numbers by 2025, with some countries like Spain potentiallyseeing twice that growth – FT August 2015 “Ukraine’sarmy of freelancers, the fourth- largest in Upwork’s global network, earned $61m in 2014 from the mainlywestern companies that dole out jobson the website” – FT September 2015 Implication: What role can telcos play in providing secure, digital ‘passports’ for this growing class of worker? Digital Futures: The World in 2025 © Ovum 2015, Informa Telecoms & Media Ltd
  17. 17. Evaluation criteria BTGS AT&T T-Sys Vodafone Orange Verizon Account management Co-Innovation Customer support Delivery to agreed SLAs Geographical coverage Network performance/ reliability/security Problem resolution/fault management Value for money Overall score 11. Customer service is a differentiation opportunity 119 112 115 115 115 131 108 110 116 116 106 110 112 124 112 104 116 113 105 90 110 121 123 128 103 105 112 93 67 83 87 110 87 77 87 95 98 94 91 96 117 115 94 112 111 108 67 92 92 111 122 97 100 102 Best in Class Good Fair Needs improvement Implication: How would you score? Digital Futures: The World in 2025 © Ovum 2015, Informa Telecoms & Media Ltd
  18. 18. 12. Telco real-world ups and downs are learning opportunities • Retaining value, to some degree, in the network – re-investment (inc. security) • Unified communications • Some degree of mobile VAS • Business outcomes, in some cases • Application-led approaches • Siloed ‘digital’ teams • Cloud – at least initially • SI relationships of the past • Service management and customer experience Digital Futures: The World in 2025 © Ovum 2015, Informa Telecoms & Media Ltd
  19. 19. Implications – further transformation ahead Capital– most telcos will have to choose where to invest Skills – apps, mobile and PS skills are rare and costly Sales – salesforce transformation required Relationshipsand brand – a voice with CXOs; a brand in SME Partnering – many telcos are bad at this (vendors, SIs, channel) Support – don’t underestimate importance Digital Futures: The World in 2025 © Ovum 2015, Informa Telecoms & Media Ltd
  20. 20. Telcos are succeeding in ICT, but it is a long game Experience Brand Network Reach But reasons to be hopeful abound Digital Futures: The World in 2025 © Ovum 2015, Informa Telecoms & Media Ltd
  21. 21. Thank you. Questions? +44 (0) 207 551 9385 | evan.kirchheimer@ovum.com Ovum.com | @OvumTelecoms
  • BulentYildirim2

    Jul. 25, 2017
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    Aug. 1, 2016
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    Apr. 21, 2016
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    Mar. 11, 2016

• How will the future nature, shape and size of the enterprise buyer of 2025 differ from today? • Which ‘taken for granted’ services will disappear? • What factors will enable SPs to succeed, or cause them to fail? Evan Kirchheimer, Practice Leader, Ovum

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